Agents declare war on REA

Real estate agents are following through with their threat to establish new advertising websites to compete with market leader realestate.com.au, owned by ASX-listed
REA Group
, with an explosion of new offerings in the past few months.

But many doubt the agents can come up with an offering that can draw enough home hunters to make a dent in the $1.5 billion company’s commanding market share. Real estate companies also have a long history of discord, which has foiled numerous attempts in the past.

Anger towards REA by some of its biggest advertising clients is palpable, with a widespread view in the industry the company is abusing its market position to push through excessive price rises. There was also anger over an announcement by chief executive Greg Ellis last year that reps would directly approach real estate agents’ clients to upsell ads.

The Real Estate Institute of Victoria is in due diligence negotiations with a commercial backer into their advertising portal realestateview.com.au. Realestateview chief executive Enzo Raimondo said it could potentially be an injection of tens of millions of dollars.

“It is a difficult market to break. Realestate.com.au is a fairly strong business in this area with the lion’s share of the market," he said. “But agents around Australia have been saying for some time that with the rapacious pricing policies and increments, and increases in subscription fees, it’s time to look at alternatives."

But realestateview has competition from within the industry. Former AFL star Geoff Luff, who runs the Conley Luff real estate agency on the Mornington Peninsula, has set up his own site, realestate1.com.au, after a long court battle with realestate.com.au over use of ‘real estate’ in the domain name.

Luff says about 36 per cent of Victoria’s real estate agents are feeding their listings on to his site.

In Western Australia, the industry-owned reiwa.com.au in August teamed up with Kerry Stokes’s Seven West Media to launch westrealestate.com.au, which would be complemented by a newspaper print product in a major challenge to REA’s dominance in the state.

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WA real estate agent Geoff Baldwin has started his own site, viewproperty.com.au, which he says gets listings from about 80 per cent of the state’s agents. Baldwin says his site will be different from other lacklustre industry-owned attempts in the past, which were stifled by industry in-fighting, because no individual agent will be allowed to control a dominating stake.

Other non-industry players have also entered the market, such as thehomepage.com.au, owned by Melbourne developer Morry Schwarz, and onthehouse.com.au, which floated on the ASX in June.

Nielsen NetView data shows realestate.com.au is the clear market leader with 2.1 million unique viewers in August, followed by Domain.com.au, owned by Fairfax Media, publisher of this newspaper, with 1.4 million.

But sentiment against REA in the industry suggests the issue is not going to go away. Sean Cussell, who heads the marketing and brand division of Melbourne agency Marshall White, one of REA’s biggest advertising clients, said he would be supporting realestateview.com.au.

“The internet is a competitive market, and we believe the cost of internet advertising needs to stay in perspective," he said.